JSW Steel Slammed by Supreme Court: India’s Largest Corporate Liquidation
Disclaimer: This article is for informational purposes only and does not constitute investment advice.
SC Slams JSW Steel for Deliberate Delay in BPSL Resolution Plan Implementation
In a landmark judgment marking India’s biggest corporate liquidation, the Supreme Court of India has ordered the liquidation of Bhushan Power & Steel Ltd (BPSL) while severely criticizing JSW Steel and the Committee of Creditors (CoC). The verdict, delivered by a bench comprising Justice Bela M. Trivedi and Justice Satish Chandra Sharma, has sent shockwaves through the Indian corporate and legal community.
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⚖️ Key Supreme Court Observations: A Blow to IBC Intentions; JSW Steel Slammed by Supreme Court: India’s Largest Corporate Liquidation
The apex court observed that JSW Steel wilfully defaulted in implementing its approved Resolution Plan, despite there being no legal hurdles. Even after receiving the National Company Law Appellate Tribunal (NCLAT) nod, JSW allegedly delayed the process for over two years, undermining the Insolvency and Bankruptcy Code (IBC)’s core purpose — timely resolution of distressed assets.
“Such flagrant violation of the terms of the Resolution Plan has frustrated the very object and purpose of the Code,” noted the SC in its strongly worded order.
🏛️ Committee of Creditors Under Fire: Commercial Wisdom Questioned
The Supreme Court didn’t stop at JSW Steel. It also pointed fingers at the CoC, stating that they failed to exercise proper commercial wisdom while approving the plan. According to the court, JSW misrepresented facts to CoC, presented a rosy but misleading picture, and effectively defeated the rights of other resolution applicants.
“JSW did not respect or honors its commitments and tried its level best to delay implementation of the Resolution Plan without any cogent reason,” the court said.
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📉 Implications for Corporate India and Insolvency Proceedings
This judgment sets a precedent and serves as a stern warning to defaulting resolution applicants, particularly those using strategic delays after CoC and NCLAT approvals. With BPSL’s liquidation now underway, this becomes the largest corporate liquidation in Indian history, potentially involving assets worth over ₹19,000 crore.
🧾 What This Means for Investors and Creditors; JSW Steel Slammed by Supreme Court: India’s Largest Corporate Liquidation
- Creditors may now face limited recoveries through the liquidation route.
- Investors in JSW and similar companies must factor in reputational and regulatory risks.
- Future resolution applicants will be scrutinized for sincerity and capability, not just bid value.
The Supreme Court’s decisive action not only underscores the sanctity of the IBC process but also reinforces that delays in resolution plans — especially willful non-compliance — will not be tolerated. This landmark ruling may well reshape how corporate insolvencies are managed in India.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.
